All Forum Posts by: Elaine Lai

Hi BP Community!

I am in the process of procuring financing for a small new development / new construction project for a fiveplex, located in an Opportunity Zone in Denver Colorado. I am wondering, if anyone has any perspective on how expensive financing compares across options - financed via an opportunity fund investment, versus financing relative to bank financing. One caveat is, I would also like to invest some of my own money into the project, if it is financed via an opportunity fund. But I dont know what typical terms are or what people are seeing with regard to cost of financing through an Opportunity Fund -

Thoughts? Would love to hear what any experienced in new construction financing might have heard.

Thanks

Elaine

Hi BP Community!

I am in the process of procuring financing for a small new development / new construction project for a fiveplex, located in an Opportunity Zone in Denver Colorado. I am wondering, if anyone has any perspective on how expensive financing compares across options - financed via an opportunity fund investment, versus financing relative to bank financing. One caveat is, I would also like to invest some of my own money into the project, if it is financed via an opportunity fund. But I dont know what typical terms are or what people are seeing with regard to cost of financing through an Opportunity Fund -

Thoughts? Would love to hear what any experienced in new construction financing might have heard.

Thanks

Elaine

I am enamored with the delayed finance approach that you detail and still trying to wrap my brain around this as a new investor about to close on my first (!!!!) flip in Cleveland. The idea makes sense as does delayed finance, but the small subset of lenders that do delayed finance, nearly none seem to know how the rehab costs are wrapped into the delayed finance package. The last lender indicated it was the title company that would draft the HUD statement, and in which case, I would need to find a title company that was creative and progressive enough to wrap the rehab into the settlement statement. Her sense was that most probably would not. Any recommendations on a title company that knows this process and willing to include rehab costs on the HUD statement similar to @alexanderfelice example here; https://www.brokeisachoice.com/house-6/ with much appreciation, Elaine Lareina

Hello BP! I may be doing my first flip in Cleveland in the Ohio City / Detroit Shoreway area. Im looking for reasonable priced but amazing real estate attorney that is responsive and creative. Would love any recommendations you may have....

Thanks!

Elaine

I am looking for recommendations for an excellent, creative and responsive mortgage broker that works in multiple states and can help advise me as I start to build my real estate portfolio. Looking for the broker to also be an investor himself and also one that can help provide creative ideas and approaches. I am looking  to invest in SF and MF in multiple states (Colorado, Ohio, Oregon, North Carolina). I am having a hard time finding brokers that work in multiple states - thanks for any leads and recommendations!

Elaine

I am looking for recommendations for an excellent, creative and responsive mortgage broker that works in multiple states and can help advise me as I start to build my real estate portfolio. Looking for the broker to also be an investor himself and also one that can help provide creative ideas and approaches. I am looking  to invest in SF and MF in multiple states (Colorado, Ohio, Oregon, North Carolina). I am having a hard time finding brokers that work in multiple states - thanks for any leads and recommendations!

Elaine

@alexanderfelice

Hello BP Cleveland! I am an investor, who grew up and Cleveland and currently live in Colorado, looking to invest back in the ol' hometown. I am currently looking at investment properties on the west side, and hoping for recommendations for builders/contractors and realtors in Cleveland. Would love to meet up with any likeminded folks for strategy or coffee while I am back in town next Friday July 13-16, 2018.

Anyone have experience purchasing via the Cuyahoga County Foreclosure process? I may be pursuing my first purchase via a foreclosure auction there, and would love any insight on strategy.

Thanks

Elaine

Hi All, thanks for your thoughts. I interviewed about 5 builders in the area, and had gotten the range of $140 - $225 on costs, some were hard costs only, others were hard and soft. One potential partner, has built 100 doors over the last year, a number of which were slot homes - were pretty consistently running $175/sqft hard and soft cost, but not including financing; they indicated with financing worked in, they averaged $200/sqft all in. I have already been approved out of concept and have received comments back on the first submittal of SDP.  In all, I will have been in about $100k in soft cost (arch, structural, civil, surveys etc). I have a renter lined up to offset holding cost so will be out of pocket $1000/month until the construction loan pays off the mortgage. 

An idea I had, following on Rayland's (Seattle)'s idea was to sell the project, with approved plans ready to pull for construction for maybe $50k over cost, and ask for a % at the backend, with the understanding that I would stay engaged in the entire process for learning purposes, while minimizing risk during construction phase.

@dorthy ma, id love to chat and have coffee sometime! Always looking to meet others in the area that are developing, as I am new to the game but hope to continue to do more....

Thanks all for your thoughts! 

Elaine

Hi BP Community! 

This is my Very First Post. Goes along with stress right now in trying to figure out how to structure my Very First Project. I wanted to put this out there as a contest to ramp up responses and ideas for creative financing approaches to see who can help me in figuring how best to structure the deal to minimize my risk, increase learning opportunities during the process, and maximize returns in light of minimizing risk. If your approach is something I had not considered and end up pursuing, I'll hook you up with a $50 Amazon gift card as my thank you. 

The details:

Location: Denver, Colorado located in very hot real estate market in an excellent location within 2 miles to downtown.

Land cost: $475,000 currently with small 900sqft home on property

Mortgage/holding cost: mortgage is $2800; I will be renting home on property for $1750/month (so I will be paying $1000/month out of pocket holding cost) while we go through the permitting process

Permitting process: estimated to run 6-8 months in Denver before build can begin

Looking to build five, 3-story townhomes on the lot, 1550 sqft each (about 500 sqft per floor), with detached covered garage in rear of lot for four of the units. Average construction cost $175/sqft, so construction cost for all five units ~$1.4 million.

Thus, with land ($475k) and construction cost ($1.4 mil) = $1.9mil, approximately running $380k/unit

Sales price, will be about $500-$525k conservatively.

Any thoughts on how a newbie might best approach financing the construction phase with partnerships? I will need to pay off the existing mortgage ($451k) with a construction loan; at most I can put in $180k toward the build but not sure if that is wise to put so much of my own money in.

So far my best option seems to be to partner up with an experienced developer/builder who can put down cash towards the construction downpayment *and* qualify for a bank construction loan.

Other options seem to be working with investors and financing via hard money - but I worry the cost may eat me up if we slip on time/runs longer than anticipated.

Any more creative options on how to do this to minimize risk, ensure working with someone that can get it done in a timely manner, and minimize cash I need to put into the deal? Thanks so much for any thoughts!

Elaine